“And the battle begins”: Inside the City, El Paso Zoo Society’s dispute over membership funds
EL PASO, Texas (KVIA) -- The City of El Paso is getting ready to close out its contract with the El Paso Zoological Society and questions remain about how much money was raised from the Society selling zoo memberships.
According to the agreement between the City and Zoo Society, the non-profit got 75% of the membership sales, while the city got 25%. The Society has said it helped raise over $10 million in the last seven years for the El Paso Zoo.
For several days, ABC-7 has been trying to get information from the City and Zoo Society about how much money is in the bank from membership sales, who has access to it, and whether the sum includes both the 75% and 25%.
The El Paso Zoological Society maintains it doesn’t have to turn over its remaining funds to the City.
“The agreement states that all the funds must be 'spent/used by the Society' for the purposes for which they were raised,” Zoo Society Board President Pam Agullo said in an email Saturday after ABC-7 repeatedly asked questions about the membership money. “There is nothing in the agreement that says that any of the funds must be transferred to the City. Neither 25 nor 75%. The City is ignoring the language of the agreement. Even when the agreement was in place, the Society never gave/transferred funds to the City to be used without any checks or balances. Instead, the Zoo director submitted reimbursement requests and the Society reviewed those and approved or disapproved them. The amount of funds is really not the issue.”
After reviewing the agreement, ABC-7 could not find any language that required the City to submit reimbursement requests to the Zoological Society for its use of its 25% share.
The Zoo Society insists the City lacks legal basis to request both the money and financial information after their agreement expired March 17, and that has “reignited challenges,” according to a news release the Society issued Friday evening following our inquiries.
ABC-7 also reached out to El Paso City spokeswoman Laura-Cruz Acosta last week about the membership money. The City declined to comment at the time but sent out a written statement late Friday which said, in part: “Since before the expiration of the agreement, the City has repeatedly asked the society to account for all the funds. The City has repeatedly urged society to consider allowing for a full accounting of funds and expenditures by a mutually agreed upon third party CPA. They have declined to do so.” The City's statement also expressed concerns over what it called a lack of transparency and financial accountability of the donations made, and memberships sold by the Zoo Society.
What did the agreement say?
Under the agreement reviewed by ABC-7, the Zoological Society was tasked with promoting and supporting the Zoo and its programs in conservation, education and recreation. The agreement also required the Zoo Society to fundraise and help manage volunteers for the zoo.
At least 25% of membership sales had to be spent on the development, marketing, operation, education, conservation and promotion of the zoo, the agreement showed. All the remaining money had to be spent on the betterment of the zoo, or society-sponsored projects that had to be agreed on. The agreement, however, is not clear about what happens to the money if the contract is terminated.
The Society was required, according to the agreement, to give the city a copy of its annual financial statements, along with “reports through the Director to the City Manager, or designee, with respect to amounts collected and expended by the Society on a quarterly basis.”
That’s something a recent city audit said was not happening.
“In the past the Zoo Society has provided the quarterly reports solely to the Zoo Director. Moving forward, the Society will provide the quarterly and annual reports directly to the Comptroller’s office and provide a copy to the Zoo Director,” the Zoo Society wrote in its response to the audit.
The Audit also said the Society was raising and discounting membership prices without getting approval from the zoo director, which was required under the agreement. The Zoo Society said going forward, it would go to the director before making any changes.
While non-profits like the El Paso Zoological Society are not subject to open records laws, they need to provide a 990 form to the public for inspection, which needs to be filed with the IRS each year.
According to the Society’s 990 form from 2022 reviewed by ABC-7, the organization raised just over $400,000 in membership sales, and had $1.3 million in cash and other assets in the bank as of August 31 that year.
The January 10 audit showed the Zoo Society has funded several projects, including the digital x-ray equipment in the veterinary clinic, the McKee Giraffe Shade Structure and Viewing Hut, the Hunt Family Splash Pad, and the Foster Tree House Playground, to name a few.
“And the battle begins”
“DO not poke the bear….because you may get bit. I killed a 63 year old non profit, put 9 people out of work and made 1.6m for the zoo in one move,” wrote El Paso Zoo Director Joe Montisano in an email to Ted Molter, a consultant for zoos, dated February 27, 2024. It was a day after the El Paso City Council voted to not renew the original 2012 license agreement with the Zoo Society that was set to expire March 17.
ABC-7 spent several days looking through email correspondence between city officials and Zoo Society members that date back to 2022. We obtained these after filing an open records request with the City under the Texas Public Information Act.
The city initially declined to comment on the emails. We had also reached out to Montisano on Sunday for an opportunity to respond.
City spokeswoman Laura Cruz-Acosta sent us a statement on Monday on behalf of Zoo Director Joe Montisano that said he "would like to sincerely apologize" for what he called a lapse in judgement. "
"I sent out two inappropriate emails from my work account that I deeply regret," Montisano said in his his written statement to ABC-7. "Not to justify them, but they are both out of context. I received emails from two intimate friends and attempted to make an inappropriate joke about the end of a 60-year relationship. In a very callous, tongue in cheek manner, I responded with an unfortunate attempt at humor and bravado without thinking about the impact to my organization and my personal reputation. Again, this is not a justification, but I wanted to put it into the context it was intended."
Montisano went on to apologize to city officials, the council and the mayor, along with the community in what he described as a "lapse in judgement and complete lack of professionalism."
In an interview with ABC-7 on Monday, El Paso City Mayor Oscar Leeser said the council does not condone that type of behavior or talk, but, according to him, it's up to Interim City Manager Cary Westin to handle it.
Just hours before he sent the email, Deputy City Manager Dionne Mack alerted staff, including Montisano, and Zoological Society members, that the City Council directed Interim City Manager Col. Cary Westin to close out its current contract with the non-profit, a partnership that had been in place, according to city officials, for 60 years.
“The El Paso Zoological Society has been our valued partner for many years. Transitioning at this time will enable the El Paso Zoo and Botanical Gardens to directly oversee mission-critical aspects of their work and sustain the financial health of the organization. Expenses continue to climb, and City departments continue to adjust to post pandemic conditions. This has had continued financial impacts which required a reassessment of the longstanding practices and relationship,” Mack wrote in an email the evening of February 26.
“We fully understand our agreement expires March 17th, at that time, we will remit any remaining portion of the 25% of membership revenue to the City. Disposition of any remaining funds will be determined by the Board of Directors,” Zoological Society Board President Pam Agullo wrote to Deputy City Manager Dionne Mack the next day.
On February 28, Zoo Director Montisano emailed Michelle Thatcher, CEO of the US Green Chamber of Commerce, “And the battle begins.”
The road to a contract dead-end
While contract discussions have been very public in recent months due to the fallout between the City and Zoo Society, there was a lot going on behind the scenes, sometimes tense, all the way back to 2022, according to emails reviewed by ABC-7.
Records show the City and Zoological Society were working on a contract extension that would carry the partnership from December 2022 to March of 2023.
“Hi Renee, last we spoke you mentioned the Society has hired a consultant to help you with contract modifications or a suggested new contract as we move forward. Do you have an approximate timeline as to when we will see the first draft or any results of his work,” Zoo Director Joe Montisano wrote in an email dated April 21, 2022, to El Paso Zoological Society Executive Director Renee Neuert.
“Joe, we are finishing up our ‘Partnership Agreement’ with a few more edits. Then it goes to the Executive Committee for review. That will be the first week of May with final review and approval by the Board of Directors,” Neuert responded.
In July 2022, Montisano followed up with Neuert. “Hi Renee, any word on when the city will get the Society version of the new contract?? Legal is getting nervous as is goes bad 12/18 working backwards I need 30 days to get it through city council, legal will need 60 days to review and adjust and get you back an amended copy, you will need 30 days to meet with the board to review, etc... Time is basically running out."
“Hi Joe, the final revision goes to Executive Board this month, with approval from the full Board in August,” Neuert responded.
By mid-August, the Society was still working on the agreement.
“Good afternoon Board Members: The Executive Committee has been working diligently on our License Agreement with the City of El Paso. There is much to consider. We meet this week, but found we needed more time. Now we are meeting on Wednesday, August 17 at 4:00pm at the Zoo. Therefore the August 18 Board of Directors is cancelled. If you are interested in attending the meeting on Wednesday and want to assist us on the License Agreement PLEASE JOIN US. Once we have a final draft, the License Agreement will be sent to the full board for review and vote,” Zoological Society Executive Director Renee Neuert wrote in an email dated August 12, 2022.
By December 2022, the City proposed additional meetings for oversight as emails suggest friction between the parties.
"Good afternoon: I will forward a copy of the executed document once signed and stamped by the City Clerk. I would (sic) to set a recurring series of 1.5 hour meetings in January and February for negotiations. Please let me know the negotiation teams availability Thursdays and Fridays,” Deputy City Manager Dionne Mack wrote to Zoological Society members on December 9, 2022.
“We appreciate scheduling information. I will forward your email to our Board of Directors,” Zoological Society member Renee Neuert replied to Mack. “We would appreciate if you send us the City’s first draft of the agreement. To clarify- at the zoo management meeting on December 7, 2022 I shared exactly what you presented to Pam Agullo-President, Frank Nugent-Treasurer and myself on Monday October 31, 2022. It was not an interpretation. It was the slide you showed us in response to the License (Partnership) Agreement we submitted to the City. Nothing more. Moreover, I gave only the information you presented on 10/31/22 due to widespread gossip, misinterpretations, and rumors on Zoo grounds.”
A few days later, Neuert requested Montisano send her his revisions to their agreement.
“Good morning Joe, In the previous email you indicated that you made a few minor comments to the MOU and sent it to City Legal. Would you please send us a copy of your edits and the document you sent to City Legal? This way we are all on the same page."
“Hi Renee, No, I will not be doing that,” Montisano responded. “Some of my suggestions and comments I made may not be valid or fit in with the legal departments review of the document. Legal may toss everything I added and I am sure they will add some items of their own. In order to keep us on the same page you will get back a single copy that incorporates my suggestions, the legal department suggestions or issue if they have any and then of course any questions they may have about the document or parts that still need defined.”
“Good morning Joe, the objective to share our MOU with you prior to sending it to the City was to ideally have an open discussion and communication with you directly on the details in order to come to a mutual agreement on this 1-million-dollar sponsorship,” Zoo Society Board President Pamela Agullo wrote on December 22, 2022. We are confident that this, like other additions to the zoo we have funded, will be a tremendous attendance driver to the zoo over the next 3 years. In exchange for this, as outlined in our MOU what we ask the zoo commits to is to having a clean and ready Amphitheater space and a technician to operate the sound for presentations. Hard to understand how this collaboration could possibly generate any inconvenience or strain to the zoo and would therefore require the MOU be significantly modified. With that in mind, we are extremely disappointed that you would not only disregard our request and intention to discuss this openly and productively, but that you would neglect the fact that the draft we shared with you was still open to revisions as well as subject to approval by the Board of Directors.”
Deputy City Manager Dionne Mack stepped in.
“Good morning- I’m not sure if there was some miscommunications off-line. Mr. Montisano has express excitement and unwavering support for this venture in writing to leadership and our legal team. All agreements are reviewed by our legal team. There is a clearly defined process for all operations staff to include the City Manager. The team will likely have the reviewed document back early in the new year,” Mack wrote.
On December 29, 2022, Zoo Society President Pamela Agullo sent an email to city leaders, including former City Manager Tommy Gonzalez, requesting a meeting with him over what she called an “uncomfortable situation that has recently developed, gained momentum and is a serious cause for concern to our organization.”
“As soon as the contract negotiation process began, Zoo Society staff began experiencing an increasingly hostile environment at the Zoo. It has gotten worse over the course of the last 3 weeks. Namely, Zoo Society staff has been made to feel the Society is going to be kicked out and pushed aside, which is being proposed by the City, even before negotiations on the ongoing partnership formally begin. To name a few examples of the hostile environment we are experiencing, our volunteer staff is no longer being asked or required in advance to secure volunteers for events, emails concerning ongoing activities as well as upcoming donations by the Society are not being answered in a timely manner, Zoo staff are being told we will no longer be an ongoing partner for the Zoo, the Society’s very successful winter zoo camp was not offered due to unanswered emails and miscommunication, our current volunteer office was recently measured to apparently make way for volunteer staff independently secured by zoo administration, and starting in January 2023, our organization will be excluded from attending zoo management meetings,” Agullo wrote in her email.
What’s next?
As of right now, the El Paso City Council is scheduled to discuss closing out its contract with the Zoological Society on Monday. That conversation will be behind closed doors, in the executive session.
The Society has rejected the City’s request to have a certified public accountant review the non-profit’s finances, and instead called for mediation.
Meanwhile, the City has maintained it’s confident the zoo, a City department with a $10.1 million budget, will be able to absorb the Society’s responsibilities.
In an interview with ABC-7 on March 13, Deputy City Manager Dionne Mack told ABC-7 “We now have 147 (employees) out at the zoo, and we know that across the organization we’re selling memberships, we’re managing our volunteers, we know that those things can be managed with our existing staff,” Mack explained.
“All of the operation is in the cost and expenses they need on a daily basis or actually included in their adopted budget,” Mack said.
This story was updated on Monday, May 20, 2024, to include a statement from El Paso Zoo Director Joe Montisano and El Paso City Mayor Oscar Leeser.
